Service means new revenue...if electrical contractors prepare

If you’re still in business as an electrical contractor, you’re doing something right.

You know just how tough the business environment is today. Between 2007 and 2010, residential housing starts dropped 57 percent. Business spending on real estate and equipment fell by $284 billion between 2008 and 2009, to the lowest level in five years.

For electrical contractors who have focused their business on new installations and renovation projects, it’s especially tough. Even successful companies with money in the bank have put such projects on hold. When they do open up, the competition to win low bid can be brutal.

There’s not much profit in that. Maybe it’s time for a different approach.

A new focus for your business

A thermal imager, such as the rugged Ti9, greatly increases the speed of inspecting, repairing, and verifying electrical and (electro)mechanical equipment.

There’s a formula that works for contractors in heating, ventilation, and air conditioning (HVAC), says Steve Uhrich, field supervisor and customer coordination manager at Valley Electric in Everett, Washington. By building long-term relationships and selling service and maintenance contracts, many HVAC firms manage to keep a nice warm flow of cash coming when new construction jobs are frozen shut.

Though companies may be holding back on capital investments, Uhrich says, they still need a reliable, high-quality supply of electricity to operate. “They’ve cut the budgets, and now they’re seeing that they need to take care of their infrastructure. If they let it go too far it’s going to be beyond repair and they’ll have to replace it. So they’re trying through maintenance dollars to stretch out the longevity of their electrical systems.”

That means they need someone - an electrical contractor would be a great choice - to test, inspect, and maintain those systems. But launching a service business that pleases customers enough to grow and generate profits takes forethought, dedication, and hard work. Success may require a major revision of the contractor’s business approach.

Recipe for success

Here are the major requirements Uhrich and Weindorf say contractors need to enter the electrical service and maintenance field:

Make the commitment - Success begins with a serious commitment to this new line of business, backed by investing man hours and money. “Be willing to dedicate somebody to go out and grow the business,” says Weindorf, “somebody who’s going to go out and talk to customers, bid the work and manage it. Spend a half an hour a week and you won’t get much traction.”

Add sales skills - “Without sales, nothing else happens,” says Uhrich. “Contractors need to go from a competitive bid mentality to one-on-one sales, where you’re actually dealing directly with the customer who’s going to buy the product you’re offering.” They need to identify the decision maker - in finance, operations, or another role - and make the case that a service relationship can help solve their “hot button” issues: to control costs, ensure safety, maintain uptime, reconfigure the facility - the list is long.

Find the right people - Service and maintenance takes a broader set of skills than construction. “A lot of construction is almost assembly line work,” says Weindorf. “For service, you have to be McGyver! You have to be able to talk to the customer, understand what they need and do a lot of different things, sometimes on a really short timeframe. It requires somebody with a lot of knowledge, who is confident in their abilities.”

“It’s not as simple as pulling two electricians off the job and sending them in a van with some pipe and wire,” says Uhrich. “The technology and details of electrical maintenance will be foreign to them. You have to put a lot of effort into training and gaining experience.”

Focus on relationships - Construction projects come and go, but service success requires long-term engagement with the customer. Most electrical contractors have people who are personable, knowledgeable, and well suited for building relationships, according to Uhrich. “It’s not as big a dollar number and there is a lot of headache and hassle involved, and a lot of logistics.” Weindorf says. “But if you perform a miracle for the customer they will remember that, and they’ll probably have you back again. Service will also get your foot in the door to bid on larger tenant improvement projects.”

Adjust expectations - “This type of work generates smaller projects,” says Uhrich. “It takes a long time to grow.” Contractors may be used to seeing estimators and project managers in the office all day, but a good service manager will be out in the field engaging with customers. Service sales should be built on providing value, not only the lowest price. Bottom line: the steady income that service work can generate will be worth the investment.

Develop soft and hard skills - Service electricians are the face of your company. Spend more time mentoring them on soft skills like how to communicate with the customer. Set up an easy-to-use customer report template. And train your team on the full range of what their test tools can do. Service electricians need to know how to interpret the readings they see and how to explain the findings to the customer. Otherwise, says Weindorf, “Electricians do not know what readings to expect, so the test tool winds up troubleshooting the electrician, NOT the electrician using the test tool to troubleshoot the circuit.”

Train up, in class and on the job - Uhrich sees a natural progression from wireman to service technician. “In addition to test tools, wiremen that are going to be service truck and maintenance electricians need training and practical experience in motor controls, fire alarms, control systems - including power and low voltage types - and power distribution, including switchgear, panels, transformers, and feeders.

“All of these systems tend to have problems when they are first installed, and someone has to troubleshoot and fix them,” Uhrich added. “The more training and experience a wireman receives at troubleshooting unknown electrical problems in the systems they install, the better they will become.” These skills can be taught in class, but most learn them through experience.

Know how to inspect the wiring, grounding, and controls wiring systems - to

ID minimum code requirements

Determine if higher requirements might be necessary for the proper operation

Provide recommendations for enhanced grounding and wiring

Know how to pick the right test instruments to accurately and correctly measure what is needed to properly troubleshoot the equipment

Understand how to interpret the data from the test equipment

Be able to prepare a factual and understandable report for the customer integrating the results of the visual and electrical tests. That report should answer these questions:

What is the problem?

What is causing the problem?

What are the consequences?

What are the recommendations to correct the problem?

Tool up for success - Like a modern physician, a service electrician needs some pretty smart tools to locate, diagnose, and fix problems - and to demonstrate success to the customer. A stethoscope alone, or a beat-up old multimeter, won’t get it done. Test tools like power analyzers, thermal imagers, and vibration testers don’t just help ferret out problems that customers would never find on their own; they also boil down all the data into easy-to-read results, perfect for customer reports. Other tools, like a multimeter with detachable wireless display, enable a lone technician to safely perform tests that would otherwise require two people, making your onsite staff that much more nimble and (cost) effective.

Conclusion: Succeeding in electrical service and maintenance work will require many construction-focused contractors to make some real adjustments. For those that stick with it, the results in steady, repeated work will be worth it, now and in the future.